The Canberra Business Chamber’s latest Business Beat survey shows that business conditions have stabilised over the last quarter, but the outlook remains gloomy for many businesses.

“Half of businesses report that they didn’t meet their performance targets in the last quarter, and 36 per cent report a negative or very negative view of the business environment,” Canberra Business Chamber Chief Executive Greg Harford said today. “This is a slight improvement on the results of the previous quarter’s survey, but we have seen a decline in the number of businesses expecting to grow over the next 12 months.

“The economic situation is proving challenging for many businesses at the present time, and the biggest issue is the increased cost of doing business, with 71 per cent of firms citing this as a major issue. Higher Interest rates are driving higher debt servicing costs, there continues to be upwards pressure on wages, and the cost of utilities and materials and for many businesses continue to increase.

“Consumers are also under pressure because of interest rates and inflation, which means that many businesses are unable to pass cost increases on at the present time. 44 per cent of businesses report a drop off in customer demand, meaning less revenue is coming in the door. Businesses are trying to absorb costs to remain competitive and meet the market, but this is unlikely to be sustainable in the long-run, with 43 per cent of firms reporting that cashflow is a problem.

“Red tape and compliance continues to cause significant angst for Canberra businesses, with 58 per cent reporting this to be a major issue.

“Overall, the business environment is difficult at present, and there are real challenges over the next few months. We have yet to see what impact the 1 July tax cuts have had on business confidence, and the Chamber remains hopeful that we will start to see interest rates start to move downwards, which will relieve pressure on the cost of business.”

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CBC Media Contact: Greg Harford, CEO of CBC, 0423 357 066
CBC Office: 02 6247 4199